MacKenzie Scott is a philanthropic powerhouse. She’s the world’s 35th richest person, largely due to the fortune she and her ex-husband Jeff Bezos amassed building Amazon. On top of that, she is both a writer and a major donor to charities across the globe. In fact, she has given away a staggering $14 billion.
The significance of MacKenzie Scott’s recent donations has made countless news headlines over the last few years. However, it’s not just the amount of money that she has donated that’s getting noticed; it is the fact that Scott has made all her donations unrestricted, which means it’s totally up to recipient organizations, and their leaders, to decide how to use them. Whereas, restricted donations allow a donor to earmark funds for a certain project.
Why MacKenzie Scott Opts for Unrestricted Donations
Unlike the majority of big donors and foundations, Scott believes deeply in giving unrestricted donations. Scott gives unrestricted donations because she trusts the organizations themselves to make the right choices; in fact, it’s one of the biggest factors in how she evaluates potential charities.
Even with a hired giving team at her disposal, Scott does not assume they can single-handedly come up with the solutions to effectively address major problems. Instead, she believes that a collaborative approach is required, along with tapping people who have diverse thoughts and backgrounds. This is where on-the-ground non-profits can truly excel with the appropriate resources.
According to Scott in a recent Medium post, “only a tiny fraction of global humanitarian assistance today is given directly to local and national organizations, and to organizations focused on the disproportionate challenges experienced by women and girls.” She and her team work to fill this void by donating unrestricted funds to high-impact organizations that are built within the communities in which their work is being done.
She also focuses a majority of her chosen charities on woman-led organizations (accounting for 60% of the organizations she supports) and organizations led by individuals who have lived in the communities they’re working to improve.
How Unrestricted Giving Benefits Charities
While restricted donations may seem like the best way to get results in the areas you care most about, unrestricted funding actually comes with many benefits.
1. Places trust in experts
As much as we all hope to be as educated about the problems in the world, no one has as much of a pulse on the issues as the people who are on the ground every single day. If you trust an organization enough to give them money in the first place, you should trust them enough to steward it well. If you don’t, then it’s smart to do some more research so that you feel more comfortable. In addition to looking at MacKenzie Scott’s list of supported non-profits, also look at research organizations like GiveWell, which analyzes and ranks the most impactful charities in the world.
2. Lessens instability & allows for more long-term impact
Unrestricted gifts support the long-term health of an organization. They can worry less about monthly cash flow issues and instead focus on the important work they do. And instead of executing short-sighted plans as funds are available, unrestricted donations allow non-profits to think strategically about their future impact. And they can also move quickly when a hot-button issue arises in the community they serve.
3. Supports employee retention
Another benefit your selected charity will experience with unrestricted funds is the ability to hire and retain quality employees. Non-profits have a higher turnover rate compared to other industries. In 2020, the annual turnover rate for non-profit employees was 19%, compared to just 12% at for-profit companies.
Charities, therefore, already face a struggle to keep experts on staff. With unrestricted funds, they offer strength and stability to their employees, not to mention a point of pride.
Is the MacKenzie Scott Giving Strategy Right For You?
There are obviously a lot of strong points to back up MacKenzie Scott’s giving methods. But that doesn’t mean they’re right for everyone, or that you have to draw a line in the sand and pick either unrestricted or restricted donations all the time.
Your decision will likely be impacted by what you hope to achieve with your financial gift. If you’re responding to a time-sensitive humanitarian crisis, such as refugee relief, then you may want to designate your funds specifically for evacuation costs or other necessary supplies.
But if you’re looking to solve long-term problems, an unrestricted donation enables a non-profit to make changes using lasting solutions, without having to worry about how the next month or year will be funded.
How to Make the Biggest Impact with Daffy
While most charities appreciate the flexibility of unrestricted donations, there are situations when you prefer your donation to be designated for a very specific purpose. At Daffy, we want to support both restricted and unrestricted giving.
Since many non-profits have multiple initiatives, we allow you to set a specific use for your donation that we pass along to the nonprofit, so the nonprofits know how you’d like your funds distributed.
When making a donation, you’ll set the amount you’d like to give, and then tap the Settings icon to see the “Private memo” options, such as Ukraine Relief, Missionary Fund, Annual Gift, and many more.
We encourage people to think about the impact they want to have with charitable giving. Then you can comfortably choose the best type of donation to help you and the nonprofits you care about achieve their goals.